Borderlands Mexico: Source Logistics eyes rising US demand for Hispanic brands

Borderlands Mexico is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: Source Logistics eyes rising US demand for Hispanic brands; South Korean automotive supplier opens $160M facility in Mexico; Otay Mesa border crossing secures $150M federal grant; and CBP snags $14M in meth from tractor-trailer.
With Hispanics making up 20% of the U.S. population and growing annually, officials at Source Logistics see big opportunities to bring food and beverage brands from south of the border into the U.S. market.
“With these fast-growing companies, you need a logistics partner that is willing and able to grow with you, to expand with you, to make the beds with you,” Raul Villarreal, CEO of Source Logistics, told FreightWaves in an interview.
Source Logistics, with its headquarters near Houston, is a provider of transportation, warehousing, distribution and fulfillment services.
The company was founded in 1999 by Villarreal and Marcelo Sada, former CEO and now president of corporate development.
Since the beginning, Source Logistics has focused on helping Hispanic food and beverage brands expand into the U.S. market. That effort has only become more relevant over the years.
The U.S. Hispanic/Latino population grew to just over 65 million in 2023, an increase 1.8% from the prior year, according to the latest figures from the U.S. Census Bureau.
U.S. Hispanic/Latino purchasing power is currently measured at $3.78 trillion, according to a recent report from think tank The Latino Donor Collaborative.
“We are truly focused on the import business. We help companies abroad; we understand what they go through when they’re trying to penetrate the market,” Villarreal said. “When we sit down and we talk about potential solutions, we think one of the most important things is that we see each individual customer as a unique customer with unique challenges. It allows us to really find or identify potential solutions for customers that are bringing products from abroad.”
Source Logistics recently opened a 271,000-square-feet warehouse in Dallas, along with a 425,000-square-foot warehouse in Laredo, Texas. (Photo: Source Logistics)
One brand that Source Logistics has helped to grow in the U.S. is Electrolit, a popular Mexican hydration beverage.
“The Electrolit brand is one of the fastest-growing beverage brands with double-digit annual growth rates,” Daniel Dibos, supply chain and logistics director at Electrolit USA, said in a news release that also credited Source Logistics’ 10-year partnership with Electrolit.
The next phase of Source Logistics’ growth plans includes targeting markets in Atlanta, Florida and the Mid-Atlantic U.S., and adding 20% capacity to the company’s existing footprint.
The strategy is supported by recent investments from New York-based financial services firm Palladium Equity Partners, which acquired Source Logistics in November 2023. The firm has invested $1.5 billion in the U.S. Hispanic market since Palladium was founded in 1997.
Since the beginning of the year, Source Logistics has opened a 271,000-square-feet warehouse in Dallas, along with a 425,000-square-foot warehouse in Laredo, Texas.
Source Logistics also recently acquired the warehousing business of LaGrou Distribution, adding 2 million square-feet of logistics space across eight new warehouses in the Chicago area.
With the recent acquisition and new warehouses, Source Logistics has a total network of 5.6 million square feet of logistics space in 24 locations across the U.S., including Los Angeles, Portland, Oregon; Houston; and New Jersey.
Villarreal said the company can now offer distribution services to reach over 75% of the U.S. population within the same day.
“Part of our strategy is to eventually reach 95% of the U.S. population within same-day transportation,” Villarreal said. “Before we acquired LaGrou, we were covering 71% of the Hispanic population in the U.S. and 52% of the U.S. population. With the acquisition, we increase our reach to 80% of the Hispanic population and 75% U.S. population.”
South Korean automotive supplier opens $160M facility in Mexico
Seojin Mobility recently completed the first phase of construction for an auto parts plant in the Mexican city of General Escobedo.
The factory will manufacture components for electric vehicles and create 300 direct jobs. The initial investment in the facility was $160 million, according to a news release.
A second phase of construction at the factory is scheduled to be completed in 2028 and includes an additional investment of $140 million.
General Escobedo is about 14 miles north of Monterrey and 155 miles south of Laredo.
Seojin Mobility, headquartered in Siheung, South Korea, is the primary supplier for Hyundai and Kia and also works with General Motors, Ferrari, Renault and Volvo.
Otay Mesa border crossing secures $150M federal grant
The Otay Mesa East-Otay II border crossing project recently received a $150 million grant from the U.S. Department of Transportation.
Otay Mesa is on the border with Tijuana, Mexico, just south of San Diego.
The grant will be used to complete construction of the new port of entry, as well as the project’s technology package, according to a news release.
Otay Mesa East-Otay II will be 3 miles east of the original Otay Mesa port of entry. It will include 10 lanes – five for passenger vehicles and five for cargo transport. The project’s total cost has been estimated at more than $1 billion.
Construction on the U.S. side is scheduled to begin in the fall with the plan of opening in late 2027. Construction on the Mexican side of the border is almost complete.
CBP snags $14M in meth from tractor-trailer
U.S. Customs and Border Protection officers recently seized more than 300 packages of alleged methamphetamine from a truck entering the U.S. from Mexico.
On April 11 at the Pharr-Reynosa International Bridge in Pharr, Texas, CBP officers discovered the alleged meth concealed in a shipment of fresh bell peppers and cucumbers, according to a news release.
The alleged narcotics have a street value of $14.62 million.
CBP officers seized the narcotics and vehicle and turned the case over to Homeland Security Investigations. CBP did not say if the truck driver was arrested or released.